membership rallied millions of us on small business saturday to make shopping small, huge. this is what membership is. this is what membership does. good morning. from new york i'm steve kornacki. a powerball ticket was sold in florida. in other game-winning news for the 35th straight year there will be no triple crown winner in horse hayesing after oxbo held off orb in yesterday's preakness. payout for betters was impressive. $2 win ticket returned $2 clon 42. the horse i picked on the air yesterday finished about 30

lengths behind the winner. anyway, right now i am joined by margie omero, strategist in democratic pollster at purple strategies. alan abramowitz, political science professor at emery university. if you listen to most of the washington chatter this week, you would have thought that president obama was about to walk across the south lawn to a waiting helicopter never to return again. as peggy noonan put it we are in the midst of the worst washington scandal since watergate. so now with the week over, let's see exactly how much damage has been done to obama's approval rating. here you can see it. back on monday when the week of scandal began, the gallup daily tracking poll found 48% approved of president obama's performance and 45% disapproved. fast forward to yesterday after that long and bruising week of watergate coverage and we see that obama's approval rating has increased to 51% with -- now with only 42% disapproval

rating. that's about as well as obama has done in any poll since his second term began. how do we make sense of this? one place to look at is our current partisan divide. among democrats president obama's approval rating stands at 84%. among republicans latest approval rating is 15%. and that divide is really the story of the obama presidency. scandal talk is not budging it either way. will's research from brendan, political scientist at dartmouth that helps explain what is going on here. he analyzed 30 years of "washington post" stories and determined a formula for house scandals take hold. one factor is when a president takes a particularly low approval rating among the opposition party. something creates incentive for the opposition party leaders to seek out and push scandals. another factor is when there is a stretch of slow news days. yet, as that 51-42 approval score for obama suggests there may be a flip side to all of this. that even when the ingreedients for a scandal are in place for

from the media standpoint, ingreedients are in place, when have you the -- as polarizing as this it is harder for a scandal, especially lay muslimsy one to resonate across partisan lines. i have to say we were thinking about doing the segment even before we saw the gallop numbers yesterday. think it had gone the other way. this would have been the latest, you know, i element of the scandal week and public starting to turn on obama. and this really gets in the way of what has been a dominant narrative for the past week doesn't it? >> really. and -- it opens up the possibility that the scandals are actually improving his ratings. which actually isn't that surprising when you consider how -- how it unfolded over a longer stretch of time for clinton. so maybe you can't fool all of the people all of the time. >> for john boehner to announce that president obama had orange juice instead of milk this week

and therefore, they are going to -- the probe on the milk industry. literally mr. boehner and his party are creating scandal. and to use a word impeachment in the same sentence as some of the minor flaps is far reaching. the people who are using these words are intellectually challenged one might say of michele bachmann, et cetera. the only real scandal, benghazi, we have been through that, done that, talked about that before the election, and -- put susan rice on the rack and pretty much clear that's not a scandal if you want the e-mail, find them. the white house has produced them. the irs thing, of course, has some traction but not very much. in 2004 the naacp was investigated after bond gave a speech about president bush. we have seen other kinds of -- i think the irs thing, you have new regulations. 70,000 applications. staff in cincinnati.

up can't -- you are extremely smart and come up with a different -- none of us around the table and come up with the notion of what is charitable work and what isn't. i don't think that's a huge thing. i think that the ap thing is a thing that for many of us in particular might stick with. again, i think that's pretty minor, too. >> there is a lot in all of these -- lot to discuss in the specifics. especially in the irs and ap what -- maybe not much the benghazi one. how that became the story an issue. what's interesting to me when you look at the numbers and -- you look at the coverage we had this week, yes, the -- from the right standpoint, you know, there has been a certain much for the career killing scandal for obama since he became president. solyndra. what made this week so interesting it did spill over to the mainstream towards the washington media which was telling us this is a scandal. >> right. people are still ultimately not following these issues as much as they have other scandals in the past. and -- part -- it is not because people don't want to consume scandal. there is a hit show "scandal" that has more viewers and people

want to read about scandal but not these. these don't pass the what does this mean for me. does this affect my daily life? is this getting in the way of me getting a job? or feeding my family or getting health care. these scandals don't really -- these issues don't really end up meeting that test. they also for most americans don't reinforce maybe what they think about the president. if you look at mitt romney and 47%, comments. that -- that was very sticky because it reinforces what people thought about mitt romney and these particular issues don't really accept for folks on the right don't really reinforce what people think about the president. >> i think what we are seeing here to some extent is similar to what we saw during the 2012 presidential campaign which is that the media, i think, are easily distracted by the sorts of events, latest thing that happened must be very for. it must be the most for thing that ever happened until something else comes along to replace it. and there's always a tendency, i

think to greatly exaggerate the significance of the events. as we saw a year ago, last june, there was this huge controversy when president obama made a comment about -- to the effect that the private sector is doing fine. and that was blown up by the media, not just the conservative media and the right wing talk shows. but by the mainstream media. we saw reporters, pundits, talking about how this was a game changer. and here we are again. we have another game changer but again, we are seeing it does not resonate with the public. >> i like this -- like this headline. >> there's a couple issues there. one is the media's search for the exciting game changer. i mate the term game changer. the media is searching for the moments and -- another one i remember last year, ridiculous thing hillary rosen made a

comment about ann romney not working and that -- this is going to turn women on obama. that sort of stuff. there is that. i wonder if there is an aspect to it. you talked about it a little bit this week. you talked to ezra klein of "the washington post" about this. about the partisan divide and how the divisions are so deep now that, you know, for anything to resonate, even something more substantive than hillary rosen or obama's comments about the economy last year or anything that resonate this climate and break that divide seems the -- standards. >> that's why you see the poll results that you were just showing us where you see this huge divide between democrats and republicans in their evaluation of obama's job performance and what we saw in the election as well. and you can go back to president bush before obama and saw the same thing in reverse. so -- >> they have warned the president -- not the president, his party, not to overreach. for my part beating up obama increases sympathy for him and there -- have been krit oyks the

left that talked about the fact that there hasn't been enough volk focus on jobs. this shows us why. you know, he can't focus on jobs. people keep pick, pick, picking at him. if the right wants to stay on this one i think it increase it is amount of sympathy people have and allow this president essentially to back off from some of the other issues which republicans are going to deal with -- aren't going deal with. they don't want to deal with balancing the budget and jobs. these are tissues americans care about. to your point people care about the fact of the unemployment rate is still over 7%. the black unemployment rate is nearly 14%. that, you know, while we have some containment in inflation we are seeing sort of those inflation numbers. that's what people care about. let's keep picking at, you know, benghazi which, you know, there are issues but not the biggest issue out there. people have been killed. we need to find out who did it. we don't ned to sit here and find out who did what and what sequence. >> every minute talking about

the irs, it is a minute the republicans don't have to talk why they are against background checks. it is a distraction. >> also, fire up their base. i mean, that's the amazing -- we did a thing on the show yesterday about benghazi and -- sort of downplaying this as a presidential scandal. and i -- the angry responses, this was -- we have a statistic here, is there a strong need to investigate the benghazi situation. three out of four, 76%. democrats, 27%. benghazi story in particular is resonating so powerfully on the right. nowhere outside of there. >> i think -- one thing that's -- one thing that's happened here is that you can blame obama for a lot of things and maybe one thing to blame him for is the decline quality of

scandal scandals. this just does not have the lemts that sets up the scandal. no bags of cash. there's little, if any, no presidential involvement that anybody can discern. there's -- there's no sex. absolutely month sex in this. so it doesn't have -- just doesn't have the coralful content. >> sex and the irs, come on. >> doesn't have any lying. >> e-mail exchanges, editing. don't you think that's -- >> that's sort after question i have. what does it take anymore for there to be a scandal, that may have people talking about? when we come back. [ agent smith ] i've found software that intrigues me. it appears it's an agent of good. ♪ [ agent smith ] ge software connects patients to nurses to the right machines while dramatically reducing waiting time.

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i want to bring dick cheney in this conversation because i think -- plays off something that alan was talking about, that this polarization goes back

to the bush era. i think dick cheney actually did understand something kind of basic about this in the political implications of the polarization. think of the story iraq trying to obtain uranium from africa. big scandal ten years ago, a year before the 2004 election. this was a real scandal, this information had been included. in his memoir this is how cheney discussed how the white house handled this. some of the presidency used to belief if we issued an apology the story would have gone away. an apology would just fan the flames. why apologize when the british had reported that iraq had sought a significant amount of uranium in africa. the 16 words were true. she saying put yourping gers in your ears and keep saying the same thing over and over again. in today's political culture you won't pay a price because your base will stick with you. in 2004, that is what worked for bush and cheney. the information was out there but the base stuck with them. >> worked well enough to get them re-elected in 2004.

i think, again, this reflect it is fact that in the political era that we are in, that almost every issue divides the public along party lines. >> people -- excuse me. i'm sorry. if people really believe people are not being fair since this president has been in office the republicans have tried to tear him down. he hadn't had five minutes of after the -- you know, his inauguration, it began then. and so -- i mean, for -- people who are loyal democrats, they see the piling on. so no matter -- you know, no matter what he says if he says the sky is blue, there is going to be a republican that finds that an impeachable offense because he is color mind it is a short-term strategy. maybe an effective short-term way to deal with a scandal or tough questions or something you don't want to -- an answer you don't want to have. but in the long view of -- getting -- giving the american people you are fighting for them and taking them into account, doing the people's business, the long view of this double talk or the constant pressure for the

scandals when that public appetite is not there, i don't think that's actually helpful for a party or any politician along -- >> the question last segment, what would it take? what kind of scandal? as we mentioned bush in '04. it is true in the second term, approval rating really did drop. he did lose, i guess, part much his base to the extent there are swing voters. he lost them. you can pin that on the scandals of the second term. put it the failures in iraq, that sort of thing. >> unpopular war, casualties there. new stories indicating the war was going very badly. wasn't a scandal so much. it was just -- the -- the way the -- war was going. and in this case, i think -- that the only thing that would hurt the president would be if there was credible information indicating that the president him sell was involved in this irs scandal, that's the only one i could see has potential to have a negative impact. he was involved -- if he knew about this, if he was involved in instay gating it the way nixon was involved in abusing

the irs during his presidency, then, yes, i think you would see a negative effect. so far no -- >> it is amazing. it does not -- there's absolutely no reason to think that anything like that is the case here. but it is amaze when you look at the trajectory of obama's presidency, in the very early days when he was first inaugurated in 2009, he was up 60%, something like that. popular guy. as soon as the republican attacks began he lost any republican support he had and fell to the high 40s i would say and approval rating has just stayed there for 40 -- it won't go -- hit 51%. that's high now. it won't get much lower, though. amazing how steady it is. >> people -- lot of people really care about the jobs issue. i think -- president obama really suffers is that -- in terms of the lack of progress that many perceive in the economy although lots of people say that gdp growth is up and it is 2.5% last quarter, that's not enough. it hasn't trickled down enough. will you see -- i would suggest

that his popularity -- ratings would judgment when the unemployment rate got down to 6.5% if it could. since it hasn't and republicans have blocked every attempt he made to change things in the jobs situation, it is -- what these folks have done and i hate to repeat a point but they -- every time that this president attempts to make progress they stifle. we have dozens if not hundreds of presidential appointees that are empty because republicans will not basically approve anybody. you have a national labor relations board that is infective because it has two members in a quorum the s three. this has been the kind of blocking that's been done so that you can make an argument this president is infective and this is just -- additional piling on. i don't think that president obama's brain works stand dal-wise. i don't think he is the type of person you find in a scandal. you are not going to get a sex scandal. you are not going to get his hands on the cookie jar or fingerprints on anything that said he was stealing. those things are outside of the realm of this very decent

president. you are not going to have anything about a fake scandal. >> you take this irs scandal. the cheney approach to that would have been to say we did everything right. this is nonsense. let's move on. obama has denounced the facts of this scandal in stronger terms than are warranted by the facts. if -- this story in "the new york times" this morning paints a picture of this sad little office in cincinnati with his overwhelmed, underpaid, overworked civil servants with immense flood of applications for this charitable status and it is clear that most of them are coming from the -- huge majority of them are coming from right-wing groups. that's the ones they investigate. >> it wasn't just -- no. there was -- a percentage of liberal groups that were also investigated.

it is pretty clear that this was -- that this was not a genuine scandal. >> it is interesting -- >> forcibly came out. >> so when -- when the public -- when the public learns of the muddled par ed muddle d pathetic nature of the scandal that will not hurt obama. without it have hurt him to just come out cheney-wise and said -- >> he made the brilliant political calculation that beating up the irs is good politics. margie wants to get something in and she will as soon as we come back. everything. everything. everything. everything. everything. everything? [ all ] everything? yup! with the new staples rewards program you get 5% back on everything. everything? everything. [ male announcer ] the new staples rewards program. get free shipping and 5% back on everything your business needs.

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nothing -- aren't the drones you are looking for, not the scandal you are looking for. i think that's another way that makes the -- this irs piece so different. >> different kind of scandal. i want to put up a tweet here from -- rupert murdoch this week. responding to the irs story. i love that rupert murdoch is on the story poll way to handle the irs story is for a special prosecutor. one politicized government investigating another arm, bad week. used the term special prosecutor. i want to talk about it because -- after watergate we had this explosion of independent counsel special prosecutor, lawrence wolf, during the clinton years, it just -- went crazy with it. that seemed to be the standard call by the generation. every time there was any hint of any scandal near the opposition party calls for a special prosecutor, i think we saw with ken starr, lewinsky, clinton stories, people saw the excesses of that. have we reached a point rupert murdoch is calling for it, i'm not hearing this echoed a lot in the political system now. are we past the special

prosecutor? >> of course. you are going see the opposition call for a special prosecutor. that's their way of trying to focus attention on this so-called scandal. but -- i don't think you are going to see the obama administration or any future administration agree to a special prosecutor unless their backs are up against the wall because they have seen, you know, the risks of doing that and the fact that once you appoint that special prosecutor, then -- things can get completely out of control. >> with the -- monica lewinsky case and ken starr, the summary document was about six inches tall. this was a summary document and then they had transcripts of ref person they talked to and you might have had -- thousands of pages of so-called transparency on the part of it. this doesn't begin to warrant that. these people are using language that suggests something far more serious than it is. margie say when the irs admits that there's something here but meanwhile there is this piece of journalistic organizations that

used to get six months to get clearance are now getting as many as three year years, a piece in the "washington post." these people are overwhelmed. special prosecutor because budgets have been cut, because there is this -- sequester at the irs, i don't think so. >> the polls show people want -- mentioned this gallup poll, people want to see an investigation. an investigation when it comes to the irs or benghazi. when you look at public opinion, it is actually a low bar. it is something we immediate to be mindful of. people say let's investigate. i think that is the potential pitfall for anybody talking about this. that people are going to want to say, wrestle, why shouldn't -- if there isn't an issue why shouldn't we are -- >> could draw a distinction, too. i think in case of the irs totally appropriate and i'm glad to see congress is looking into it. this is the function of congress. oversight. you have an -- lots of questions raised about the agency and you can have congressional committee looking into this. you know the distinction between doing that and what's totally appropriate and calling for the independent prosecutor we saw with ken starr it was -- it

was -- you know, lame dealings in arkansas, 1980s that never amounted to anything and that's where it started. three independent prosecutors later, you have the blue dress in monica lewinsky and crazy. i'm wondering if we are finally past that in our politics where people lean on independent prosecutor. >> the problem with a special prosecutor is that prosecutors prosecute. that's their goal in life. if you want to have an investigation of the goal, it is to establish exactly what happened. so as you say, yes, there has to be an investigation. but the approach to the prosecutor approach which has burned every administration now, regardless of party and regardless of guilt, too, jimmy carter's first couple of years where -- marred by a special prosecutor investigating hamilton's behavior at parties, it is a very -- it has always been a bad idea in the special prosecutor idea. but investigations, yes, sure. >> investigations to establish the facts. >> investigations quickly tend

to turn into very partisan affairs. >> if anyone believes daryl issa is interested in uncovering the truth as opposed to scoring political points or trying to damage the -- >> i guess -- i guess -- should have said i like the idea of oversight, properly executed. >> that's the way they used to work. think about what happened during the watergate scandal. we had an investigation by a senate committee, urban committee, that was clearly seeking the truth. not to say there was never a hint of partisanship because will was. but -- clearly you have people on that committee at that time who are -- really interested in finding out the truth. had you republicans who were willing to expose the truth about the nixon administration. you also had -- >> you had real crimes. >> and -- also, irvin and -- always give credit to peter from new jersey, i want to thank margie omero, alan abramowitz,

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now pick up a special buy lithium ion drill kit for just $79. let's get it out of the way first. it is totally conceivable the main political impact of all the controversies that have been in the air for the last week trying to avoid using the word scandal here that the main political impact would be to fire up the conservative base and to boost gop turnout in next year's mid terms. it is also possible that -- as we just heard alan abramowitz argue, none of it will add up to anything. electoral impact in 2014. we had a gazillion game changers, awful term again in last year's campaign. you none of them changed anything. maybe we will end up looking back at scandal week 2013 the same way. there's also another possibility. it is one that republican leaders are clearly aware of and scared of. possibility that their base will get too carried away with scandal fever, that the party will be forced to spend the next 18 months treating benghazi or the irs story or both as the top

issue on its agenda. and they are worried the party might be forced to do this even if the rest of the electorate, voters that are in the part of the republican base, decide they don't think these are major national scandals. if this happens, it might end up firing up the other party's base even more in 2014. republicans are worried about this because it happened to them before. the last time there was a democratic president. >> indeed i had a relationship with miss lewinsky that was not appropriate. in fact, it was wrong. >> bill clinton, monica lewinsky, 1988. we talked about it a bit. basics. really for thing to remember about 1998, though, is that even before anyone heard about that blue dress, that year's election was supposed to be rough for democrats. it is because it was midterm election. when you are the white house party the only real question whenever there is a midterm election tends to be how bad will the damage be. it already had been bad for democrats once under clinton in 1994. second year of his presidency. when anti-clinton backlash

handed republicans 54 seats in the house and eight in the senate. made gingrich the first republican house speaker since the eisenhower era. gingrich proved to be a perfect foil for clinton, though. recovered from the '94 drubing to win a second term in 1996. his coattails were limited. republicans still controlled the house and the senate. no one was expected another '94 tsunami in 1998. it is what opposition parties are supposed to do in midterm elections. which brings us to the lewinsky mess. it is not a scandal that came out of nowhere. it is a story that came to light through kenneth star. loud republican demands for an investigation to bill and hillary's business dealings back in arkansas. whitewater scandal was called. ways not called much of a scandal. that's the point. resistance on the right when bill clinton became president was just as immediate, just as over the top and just as unrelenting as the rights res t resistance to barack obama has been. i remember seeing a car in the

spring a month after bill clinton took office, red bumper sticker declared impeach clinton. that was the mentality that animated and defined the right in the 1990s. an assumption the democratic president had to be a crook, determination to prove it. absolute conviction that the giant watergate like scandal that would finish him off was just around the corner. so the world learned about lewinsky, conservatives did not pause the gauge the public's reaction. they assumed the country saw the president the same way they had seen him for six years. >> if the evidence warrants it to vote to impeach president clinton, i would be prepared to do so on the merits, whether economy is doing well or doing poorly. >> that's not what americans saw. one poll after another in 1998, through the spring, summer, fall, showed overwhelming opposition to impeachment. this was the moment republicans have been waiting for for years, chance to file real general

impeachment article against decline top. they plowed ahead. degreefully. mike pathis took to the house floor in 1998 to literally sing the praises of a special prosecutor who was pursuing the president. >> mr. speaker, twinkle twinkle kenneth star now we see how brave you are ♪ ♪ up above the pentagon sting ♪ like a fair judge in the ring ♪ ♪ twinkle twinkle kenneth star ♪ now we see how brave you are >> was it music to the right's ears but no one els. which is why this happen when election day came around. >> it is a new day in washington, d.c. early wednesday morning, congressional republicans, house speaker gingrich, senate majority leader trent lott, and a lot of others are putting up a brave front this morning. the fact is that the election they expected to be a triumph for the gop turned into an for symbolic victory for the democrats. and the president. >> the numbers were small.

democrats picked up five seats in the house and including, by the way, mike that's new jersey and broke even in the senate. but the statement couldn't have been louder. not since james monroe's presidency in 1822, the white house party gained any seats in the second term midterm election. the fist of an opposition party intent on playing up a scandal that no one else thought was much of a scandal bill clinton's democrats pulled it off. irs story is complicated and still unfolding. we will see where it leads. but for now the story of 1998 is creating real tension in the gop. you have michele bachmann and huckabee talking of impeachment and party leaders talking as generalitily as possible to tell the guys not go too fast here. gingrich himself waited in -- weighed in this week. i think we overreached in 1998. how is that for a quote you can use? he ought to know. 1998 didn't just caught the party seats in the house but cost him his job as speaker. speaker boehner hasn't forgotten that. one of this week's so-called scandals is different from the

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>> with benghazi and to some extent the ap probe fading from the front pages it is a week wore on, the irs story took on new dimensions. testifying before the house, the treasury inspector general for tax administration, jay russell george, said the irs's internal probe was known about as early as may of last year by officials in the treasury department. >> i alerted then commissioner shulman on may 30, 2012. i subsequently alerted the general counsel of the department of the treasury on june 4 and subsequently, and i do not have the exact date, alerted the deputy secretary, neil, about this matter and then upon his assumption, and -- into the position i mentioned it to

secretary lew. >> he confirmed he had been told about the investigation and said he was only in the -- it was only in the most general terms. >> he went through a number of items that were matters they were working on. and the topic of -- project on the issue was one of the things he briefed me on was ongoing. i didn't know any of the details on it until last friday. when what i learned about it from the moment i learned about it, i was outraged. >> however, republicans were not taken by surprise either. congressman issa told bloomberg business week this past monday he had known about the investigation for the past year as well. waited for the process to conclude before making any public accusations. after this was note order saturday by the huffington post, oversight committee spokesman told them the oversight committee knew about the audit because it requested it. we rereleased this letter a week ago. it does not explain why the obama administration officials knew about serious allegations

of wrongdoing within the treasury department but failed to ask questions and take immediate action. both the administration and its critics are right there is a scandal here. congressional investigation is now beginning to play out is needed. if only to tell tuesday exact dimensions of the scandal and what shape any reform or congressional oversight might take. i want to bring in liz kennedy, counsel at the progressive think tank demos. carl smith. writes for the model behavior blog at forbes.com. kim barker, reporter with the swegive website of propublica. there have been some developments in the last would days. there is this -- i don't know, game going on here where republicans want to make it seem like the obama administration knew all about this, knew there was -- the irs was going after, singling out tea party groups, right wing groups before the 2012 election and didn't say anything about it. now we have news that the --

republican chairman of the oversight committee actually requested the investigation and probably knew the same thing as the obama administration and -- probably more to come out here but now my reading on this is everybody knew there was some kind of probe going on and that mate be about the limit of it. >> well, i mean, last year, beginning of the year, tea party groups were very open about the fact that they felt like they were being persecuted by the irs. they came out and told members of congress, members of congress, talked about it openly. so -- this was no secret to anybody. the fact that like there was this probe going on and the fact that groups had complained about it. in fact, investigation was requested early last year on -- right? >> yeah. >> i think it is entirely proper that people, you know, we are now aware people were informed this investigation was moving forward. it is entirely proper people were waiting to hear the results of the investigation and in fact, when we learned is that -- obviously, it is unacceptable that any actual names that would reflect, you know, presumed

policy positions were used to mete out these groups. what we are just see sing that had overwhelmed office was seeking to apply the laws they are charged to do and -- the mum of groups were shooting up and that they were trying to use kind of beaurocratic short happened to get in as soon as anyone in washington heard about any kind of, you know, actual viewpoint things. they were told to stop doing it and these elections -- these officials in the cincinnati office then reapplied this kind of targeted thing for review and it really looks like this office itself was more like keystone kops than big brother and in terms of what these real reviews looked for. we find only a third of the 300 groups objected for special review and actually had these tea party names and other progressive groups were also reviewed and -- the real issue is that they -- 501-c 4 and 3s are actually getting involved in political campaign activity and the irs is charged with making

sure that these groups aren't abusing the tax laws. >> it is -- i mean, there were -- we have a case of progressive group that lost the 501-c-4 status. the only group we know really was kind of singled out by the criteria. you can argue logical reasons for doing so but it was conservative groups disprorgs at at least as far as we know. >> also, the criteria said that any group that had expanded -- one advocate of the expansion of government which is pretty much going to be a liberal group. nobody has come out and said yes, i was one of those groups. kids have lawyers saying yeah, i represent clients. >> i agree we learned two things that are significant in terms of systemic failure. number one, as -- the president said, as you just said, it is completely unacceptable and it is outrageous that the irs would target or politically proceed pile groups based on their ideology or based on their -- what candidates they support. it is unacceptable. that has to be dealt with. second issue is an for systemic failure about how the irs operates. and it has been -- in this area

of 051-cs generally and 4s in particular completely opaque. if you look at its report and if you look at the ig report, you look at the reaction of the irs, they go back to, well, these all have to be judged based on facts and circumstances. if you -- if the irs were more transparent and provided clear guidelines, what is it that a 501-c-4 can't do. what is political intervention. what does primary purpose mean? if it laid out those lines in clear public forum, then the groups that want to doing everything right would have guide posts to do it. and those who wanted monitor to make sure their groups are doing everything are doing everything right, would have guide posts to hold them accountable. what we learned is that not just the keystone kops but that basically it was a bunch of low-level irs people holding up an application saying looks like social welfare to me and looks like political intervention to me and that's not a standard we should want to have. >> the thing about it is even though it gives guide posts to do the right thing, guide posts if you want to do the wrong

thing. if you are outlining exactly specifically what this means, this is also telling you exactly how to structure loopholes to get around it or structure organizations that are officially within the law bumt violate the spirit of the law and so -- that's what people always complain about. groups getting around, hard and why is it common sense? when people try to do it in a common sense way, this is what happens. >> there is a -- that's the issue. that's the issue here. idea this has fallen -- through the evolution of campaign finance, this has fallen to the irs and irs is clearly or was clearly woefully unprepared to deal with this latest evolution of a campaign finance, i want to talk about how we got to this, what the irs can do and if the irs should be doing anything at all when we come back. eeping? eeping? just wanted to check and make sure that we were on schedule.

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will are all sorts of issues within the irs. "the new york times" did a story today about how woefully understaffed the office is and

how it has been handling it and lois lerner who is in charge of this portion of the irs. she leaked this by planting a question at the news conference. there's a lot there. i want to talk about what i think is the bigger scandal of this. the evolution of the campaign finance system has brought us to the proliferation of the groups. 501-c-4s. under the tax code engaged in social well pair. social welfare groups that, you know, basically -- they can have some political involvement and not define what some political involvement means. this is -- here is an example. this is a social welfare group and a political ad last year. >> tax raising politician tim kaine backs cap and trade which has been called a huge tax. raising energy bills for families. putting over 50,000 virginia jobs at risk. >> cap and trade policies will kill virginia jobs. what people don't understand is the impact it is going to the working familiar fleece this country. >> energy tax will kill 1400 jobs at this company.

>> tim kaine's for cap and trade and that would cost jobs. >> that's karl rove's group, social welfare group. this is what the evolution of the campaign finance system brought us. so -- in terms of, you know, looking for solutions to where we are right now, i will go through a couple of proposals. one on the table. right now the enforcement is niece groups have to be primarily engaged in social welfare. they -- they can -- can be political. what if we just said 501-c-4s can have no political involvement whatsoever? >> that's absolutely an acceptable proposal. i think we have to take a step back, as you were saying, and look at the fact that citizens united changed the rules of the game in terms of political spending and what is currently allowed. none of the rules of the game have changed to keep up with the situation we are in. that is why you see so many c 2k4shs set up to accept -- c-4 are corporations that previously

were not allowed to influence elections but now are. the supreme court when they allowed this money to go in, assumed it would be disclosed. and yet it is not. the congress can take really common sense steps to, a, pass entirely disclosure legislation that would disincentivize people from setting up the c-4 groups which can serve as the vehicles for dark money. c-4 groups spend $250 million on those types of ads in the 2012 election without telling the american public who was funding their sources. that's the real scandal here. we can have -- disclosure legislation and you can bar c-4s set up as exclusive social welfare organizations. that's the statutory language. supposed to be exclusively for social welfare purposes even more than primarily or you could set a really low threshold to say c-3s absolutely bar on campaign activity and c-4s perhaps a low threshold. 5% to 10%. some dollar amount. that was a bright line test to enable the irs to more easily

enforce this law more clearly without currently -- to look at the totality much spending to see if they have reached this majority level. it is a mess. >> let me address your proposal. let's say you get something like that. i think the problem there is you get -- you have some group that's interested in breast cancer, mammograms for poor people, they depend a lot on public funding. that public fund sing getting cut. and now they want to say something about it. right. you know, we think what we do is for and think we are saving people's lives. they are clearly -- think of themselves in the community, we think of them as trying to -- >> social welfare groups. >> they are. >> now they become -- now they have a political message are they -- been cut off? did they get there -- are they subject to prosecution for saying no, we think people should spend the money. we think the public should support this. >> it is never going to happen. i mean the supreme court said that in the citizens united decision nonprofits, corporations and unions, can spend money in on politics unless the supreme court comes in and you get an act of congress, or the irs actually

were could tomorrow out and want to -- publish ad regulation they could say no more money spent on political advertising. but -- they don't -- >> that's -- that gets me to the point with the supreme court setting the rules they set for -- >> even beforesy sense united, nonprofits, could spend money on politics and they did. that gets lost in the fold because it is so complicate. >> which brings me to another proposal i want to put on the table that -- that will ever happen -- doubt it will happen but i want to put it out there after this.

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piece called how to fix the irs mess. at the root of all of this really is a basic problem. that's -- basic issue. the supreme court has said in two rulings over the last 35 years or so, money equals free speech. second, the corporations can give money to elections. you have that and then you look at the evolution of campaign finance reform law over the last generation or so where it basically has -- been an attempt to move political money away from candidates, away from campaigns and parties. you had soft money originally and you had 527s a decade ago after mccain/feingold. now the new loophole karl rove and other people exploit, patch up the 4 it goes somewhere else. what bernstein proposed, he said -- let's admit that this money right now because of the supreme court is -- it is out will and will find a way into the system. let it go back to the campaigns and let it be unlimited and goes to the campaigns and fully disclosed and public financing. >> i want to take -- i want to

take up the -- >> do we have an hour? >> proposal that you raised which is that the democrats in congress proposed the act that there was a time where disclosure was a bipartisan solution. remember 527s used to not disclose. then there was a 527 disclosure bill which was a bipartisan bill. it was supported by democrats and republicans alike. democrats proposed the act as a way to disincentivize one type of tax entity versus another. 527 or 501-c-4. without it create a relatively equal playing field and money would be disclosed. and i think -- and remember,sy sense united the supreme court upheld 8-1 disclosure as possible -- later case, though, versus reid disclosure was again upheld in the ballot initiative context. before you move to the more radical solutions, i don't think you ought to leave the topic of

disclosure and just throw your hands up and ait is not possible. >> you were saying that this -- proposal you were putting on the table was that it should be unlimited money which i think there are quite a few problems with but it should all be disclosed. had a was, in fact, formally the conservative position on money and politics, william f. buckley, george will saying it should be unlimited but disclosed. that's what the supreme court and citizens united thought would be the case, all of this new money would be disclosed and said that disclosure requirements allow shareholders and the public to judge if the spend sing in their interests and determine whether candidates, you know, financial relationships, between candidates and the elected officials and financial supporters and that's something the american public really has a right to and that, you know, in fact, disclosure was so noncontroversial, scalia in that case said that requiring people to stand up in public for their political acts requires civic courage without which democracy is dead. >> so the -- proposal that

bernstein made, again, i just -- interested me because if the reality of the supreme court decision is the money will be out there and we are basically seeing unlimited money in politics now, except it is taking different forms, not directly going into mitt romney's campaign, but it is popping up in a 501-c-4 and super pac, something like that. you put that in the sunlight it goes to the campaign directly and not fudging it and no cuteness. we know who you are giving to, we know you are. we say that there's also going to be public financing because the other point he makes is let's be honest. the -- money gets more and more for the lower down the ballot you go. if you have public financing and unlimited money, you know, we are acknowledging reality and trying to deal with it. >> we should absolutely have public financing. the kind that new york state may be about to adopt in terms of empowering small citizen donors so that we encourage more people and more types of people to get involved in financially supporting their candidates and more, you know, active democratic system. but the point is that unlimited

money directly to candidates is, of course, you know, what we were seeing in watergate, two candidates, outside of candidates, but that's why we have campaign contribution limits. >> briefcases of cash going -- i'm not talk about that. i'm talking about the name on the check. >> there are states that do that. it does -- it does happen. i think that like when it comes to congress, you already have a situation where everybody has to start fund-raising from day one. even before day one you have to star fund-raising. i wonder what would happen if you have unlimited donations. would there be any governance happening? i mean -- i don't know. just a question. it is a solution, most definitely. >> probably the best -- i think that would be easier. if you were able to connect with these broader groups that were -- wanted to do it full time and organize it full time and funnel the money directly to you, i think that would alleviate some of the -- what politicians have to do. on the disclosure thing i know it is consensus among lawyers

and you think it is a good idea. but -- the very issue there is that people who want to say things that don't agree with the consensus or are weird or that are out there fear the backlash that they are going to get. right? we -- we see that and -- you do see an increased -- like poll -- polarity. it is by crazy ideas people have and want to express the crazy ideas and know they are crazy. we could stand back and say why do we immediate so many crazy ideas? but -- once you do that, now you are shutting off people who are innovator and different. >> there is a relatively easy solution for that which already exists in a lot -- socialist workers party last month. the federal election commission extended their exemption from having to disclose. if you are a group that can come forward and say, look, here is the deal. we are so out of favor, we are so subject to harassment, to --

threats to dash threats of violence, intimidation, that -- disclosure of who we are, who our donors are and vendors are, would pose racing to us, will can be -- can be an opt-out procedure. courts recognize thads in other circumstance. >> absolutely. other than that, criticizing people for taking a position in an election is not the same thing as chilling speech. that's just wreg democratic accountability. so it is not the same thing to say i disagree with this person's political spend organize well, that's an interesting message but the fact it is brought to me by a huge powerful interest whose motives i may find suspect make me judge this message differently. >> in a lot of ads are incredibly hateful. you can't look at these ads and say that brought up something i never thought about before. brought up crazy. >> anthony kennedy in citizen united ruling, kennedy made the point that it would be free speech checking free speech. if you had companies engage -- corporations direct differenting

in to the political system, the key was that they are consumers and shareholders would know about it and use their free speech to check the free speech. it is -- really indicating a premarket. >> instead what we are hearing is some of the speakers wanting to take the benefit of their new rights to speak directly to influence american voters but without any of the accountability we have in our political system set up as you said candidates -- contributors to candidates are disclosed. $200 on the website. political action committees when they spend money and registered at 527s have to disclose their donors. people who play in politics have to disclose their donors. but now because of these new avenue it is supreme court set up without realizing that -- disclosure provisions, $300 million in dark money from c-4, c-5, c-6s and that's inappropriate and we immediate to fix things in clear ways. disclosure legislation, bright

line legislation, the sec rule, you know, which investors are demanding, and then, obviously, public financing at end of that would be fantastic. disclosure is absolutely necessary. >> i hate to be lawyer but i am the one wearing the tie this sunday morning. there is a difference between playing politics and playing in elections. we need to be clear and precise here. no one is suggesting -- i don't think anyone suggesting that a group that wants to effect policy, wants to lobby congress for clean water, wants to lobby congress for reasonable gun registration, laws, immigration reform. should have to disclose their donors for doing that. what do you do on the portion where they are intervening in elections. one of the things i lament about what's happened with the irs is that there had been legitimate questions raised about some groups, particularly on the right, whether or not they are abiding by these rules as they should be. and i think that what happened with the fact we now know the irs didn't have -- internal

administrati administrative right from wrong. >> i think elections form this focal point for discussion about the policies. and if you look a lot of the super pac stuff, people want to talk about my biggest thing -- most of this is not going to matter because on elections, it is about elections and it is about candidates you about it is driven by people would have particular agendas and may only want to see an ad that reflects their viewpoint. right? some don't work at all. then don't connect with the voters or any sort of impact. the reason we don't have impact is because they were written to satisfy the donor and what the donor wanted to say is i hate this, i hate this person for doing it. i want everybody to know it. and that is -- that is a -- political -- intent. that's what they want to day no influence. really, i would -- >> they -- >> would hate to marriage that argument they have an influence inside the beltway.

i don't know they change anybody's votes. >> i think the big question is super pacs at least -- acknowledge that they are political action committees and disclose their donors. what we have seen with some of these c-4 groups is that they are applying to the irs for c-4 stat us and applications say we are not going to spend money onful particulars. a group that said as they were mailing their application for the irs, not spending money on politics, already up and running ads in nevada and florida. >> and -- >> irs law enforcement question where they are not subjecting enough groups to further review. >> it is also so blurry because marc talks about the distinction between politics and elections which exists but could be nebulous because we live in sidney blumenthal called it 30 years ago, the age of the permanent campaign. i put a couple -- >> bright lines. >> we need the lines. here is the question with the scandals, i don't know want to call it a scandal but stuff happening in washington now. is there going to be any chance of getting reform at the irs now that's sort of -- problem agency? let's talk about it when we come back. is expenses while he can't work,

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i want to play what president obama had to say about the irs situation this week. >> across the board everybody believes what happened in -- as reported in the ig's report is an outrage. the good news is it is fixable. it is in everyone best interest to work together to fix it. i will do everything in my power to make sure nothing like this happens again. by holding the responsible parties accountable, by putting in place new checks and new safeguards, and going forward by making sure that the laws applied as it it should be. in a fair and impartial way. >> he is talking about reform there. look, nobody trusted or liked the irs before all of this. now it has been -- tainted with -- you know, potentially

looking after -- groups on the right, right now thinks the irs is really out to get them. and yet, it is the irs right now that's charged with overseeing these groups with all the -- money is sort of proliferating. is it -- feasible that we are going to get any reforms since the irs is going to have to implement this in the reform? >> at least people are talking about it. i mean, feel like last year i was covering the subject the entire year and a lot of times you felt like you were right into this vacuum. nobody was paying attention to. the last week i feel like people at least know that there is such a thing as a 501-c-4 and talking about it. maybe something can happen out of it. at least we can be talking about it in and america can realize all the anonymous is going into the elections. >> i think that this is something where, you know, there are a lot of different elements to solve, you know, the really unequal influence of money and politics that are somewhat more controversial or that have to be developed. this is pretty simple straightforward fix. it is getting bureaucracy right. i think -- what we -- i'm

absolutely serious. >> re. >> i yes. let's just say that. what we are hearing about, i go back to keystone kops instead of big brother. what we are hearing about is the -- >> but it could be big brother. we don't know yet. >> exactly. if it is that's where -- investigations are being made but i will say that when you view the irs -- investigative report you see they refer to the team of specialists reviewing the c-3 and c-4 applications. it was one employee up until very recently. so this poor person was overwhelmed as the c-4 applications double between 2010 and after citizen united in 2011. the point is that i think that, you know, the senate is now paying attention and we will be having hearings on this and i think we absolutely need to look at, you know, the problem with the way these laws are being -- regulations are being interpreted, the massive abuses that we have seen with the c-4 form and the fact that some of them report 87% of their

spending in election spending to the fec while complaining to be c-4 social welfare groups. there is a lot to solve but i think a bright line rule would really do that as well as actually comprehensive disclosure legislation because that would disincentive advise people from people abusing these vehicles of dark money. >> i'm trying to picture congress now won't pass anything. suddenly the republican house passing something that empowers the -- i did see it. i have to thank -- i have to thai liz kennedy from the progressive think tank and marc elias with perkins coie. kim barker with propublica. with the new staples rewards program you get 5% back, on everything. everything. everything. everything. everything. everything. everything? [ all ] everything? yup! with the new staples rewards program

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emerged for politics in the u.s. friday secretary of state john kerry discussed the bangladesh disaster with that country's foreign minister. >> cost a how lives. everybody in america shared the agony of those losses and our hearts go out to the families. we hope that this will be able to help all of us cooperate on the issue of labor and labor standards and workers, workers' rights, obviously. >> getting that cooperation, however, requires both carrots and sticks. department of labor will fund bangladesh efforts to improve factory inspection there. the administration is also considering stripping bangladesh of an import tax break unless the country improves labor conditions. this week bangladesh officials raised the monday wage for workers and make it's easier for them to form unions. retailers are taking action in the wake of the deadliest garment industry disaster in history. as of this week roughly 40

companies worldwide sign order to accord drafted by labor groups to improve workplace safety in bangladesh. agreement would establish binding independent factory inspections and require companies to help finance renovation force safety. two u.s. companies have sign order to the agreement. tuesday walmart, world's largest retailer, said it would not accept the agreement and instead would conduct its own inspections in bangladesh. thursday eight democratic senators wrote to walmart and other retailers who hadn't signed the agreement. >> american retailers, european retailers purchase some two-thirds of blank di-- garmen. we are asking the largest retailers of america to sign on to this accord to help ensure worker safety in bangladesh. >> next day the national retail federation blasted the pac as a

one-size fits all approach without recognition how the industry operates around the world. i want to bring in chaumtoli huq, professor of -- new york law school, expertise in labor, employment rates and human rights. she worked with struggling tax loophole business necessary india. so -- the story is just -- you read the accounts of this. i think i saw last monday was the first day since the collapse that a corpse had not been found. that was the milestone. obviously just you read the stories of horror and i think everybody's instinct is what can we here in america be doing to, you know, prevent this from happening again. >> right. i think that -- just to step back a little bit in order to understand -- for americans here we need to look at global economic policies that have been sort of the last 20 years. we have sort of declining labor

standards for u.s. workers. fast food workers walked off their jobs, fast food chains said same thing. we are not accountable because of the plan choice subcontract system. what needs to happen is that u.s. retailers need to sign the -- the safety accord and really need to get along with other international retailers, majority of the retailers are signed on, have been uk retailers and i think that -- the united states and american -- public really needs to push on our retailers to sign on to helping safety measures. this is a human rights issue. this is not a different labor standards for different country issues. >> i want to put a -- quote up a. this was in "the new york times." she says -- talking about the idea of holing the companies accountable for american citizens and i appreciate the unease of werner might feel knowing that the clothes on his or her back were stitched

together by people working long hours in dangerous conditions but ceasing the purchase of those good was not be the compassionate course of action. boycotting brands that do business in bangladesh might only further impoverish first need to put food on their table. she is saying that -- look, you know, the collapse is terrible but garment industry is good for us and we need you to keep buying. >> what you need is -- to empower workers to make sure that those regulations get enforced. i mean, that's true in garment industries around the world. >> yeah. i don't think it is that easy. so -- >> it is not easy. >> i don't -- i don't think it is that easy in terms of -- i don't think that solve it is fundamental problem or gets out your fundamental problem. the issue here -- i mean, just to take it back a little bit, is that -- the people of bangladesh don't have lots of options that are very poor. many are desperate. that's why they take these jobs, right. the -- in more difficult you make it for these jobs created, that pushes them back into the desperation they have.

they had before. that's always the danger when do you this. now, perhaps if you have an enormous amount of local knowledge you can tailor the perfect solution, but it is highly unlikely the u.s. state department and large retailers adopting some big system is going to be the one that assures the right thing happen s for t workers and does night put them for the lack much opportunity they had before. >> distinction between buy cotting and in terms of having safety standards and regulations. what does -- it has been advocated for the workers, solidarity center, conjunction with labor unions here and other specific minded individuals is inspect factories, make sure that the -- products are made under -- wage conditions that we have here. i think that no one in the united states should say by shouldn't have fair labor standards act and shouldn't have osha because somehow i am will impede our economy. we are saying the same thing.

i think that -- they are saying don't boycott. don't say i'm not going the buy something from bangladesh. don't do that. pressure and advocate for human rights standards and that uplifts the labor standards so that -- the workers do not have to make that catastrophic life-threatening choice between job and life. that's not something acceptable in 2013. the number is over a thousand. we saw 146 dead. we are going backwards. we are not going forward in terms of labor standards. >> where is -- i mean, the reason that -- all of these factories are sort of proliferated in bangladesh and reason these western companies are doing business with them is, you know, it is -- cheap. right. it started in new england. started where i grew up in lowell, massachusetts. used to be textiles. we are talking about bangladesh because the labor is so cheap. i'm for improving standards, too. the companies set up shop over there because it is cheap.

if you raise the standards do they just leave? >> such a huge point because -- you are from massachusetts. i'm from north carolina. i -- you know, my mother worked in a textile mill and came from massachusetts from -- to north carolina for that reason. and, you know, i share this great -- for on hundred years factories moved from massachusetts to north carolina because north carolina was the poorest state in the nation, the lowest wages in the nation and they had free rein to do what they wanted to do. that employed my mother and gave me the life hi and that -- you know, pushed forward our state. we have done a lot of great things from that. it was horrible for massachusetts but on that, we felt like that was a good. we felt like coming after -- coming here was good and employment was good. and -- so -- it helped north carolina. it improved standards of north carolina overall because what you had was farming, you know, hilly soil. that was your alternative. >> you are looking at the short

term versus long-term investment in the worker. works workers in the labor force. you are looking at in the short term these jobs are -- moving women into the formal economy. there are opportunities for employees and in both the u.s. and north carolina and in massachusetts where my business is operating in lawrence, massachusetts. and bangladesh or around the world. you are also looking at the long-term growth of bangladesh's economy, how do we empower because it is not easy, not an easy question but it is good for business. i think the business and opportunity for retailers and manufacturers alike to say that worker empowerment can be good for business, productivity, efficiencies, and things we can achieve when workers aren't worrying about how they are going to pay bills and taking care of health concern and when they are empowered to be efficient productive parts and building a company, building a global economy. >> every society goes through the same process. start with cheap labor. people that are more expendable

like women were in the 1930s and 1940s in lowell. they start to form unions and start to get better conditions and politicians pressured to help to make things better as well. big strikes like 1912, for example. then labor -- then companies -- if they can leave, they leave to go the cheaper places but then the same process has to start in those places. now we have a global economy and i think it makes sense to have global standards. companies like walmart. >> it is a process. you are slow in the process of those companies. >> okay. i want top -- want to let you get in here. >> some concept. ♪ [ male announcer ] book ahead and save up to 20 percent at doubletree.com, so you can sit back, relax and enjoy. doubletree by hilton.

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garment and it has been in an op-ed, the founder of micro finance, it would get some -- greater inspection into the local -- factories and some fund, walmart, gap have refused to provide compensation for such a tragedy of -- that will have ripple effects in terms of families. it is going to -- have a partnership with local officials as well as with retailers. companies have to care about where their product is being sourced. it is good business. it is good corporate responsibility. and that is really what -- we are not talking about impeding the progress. we are talking about a human dignity and basic level of rights and standards. >> there was a -- i want to put this -- this -- mady makes the case that -- have to accept a certain level of tragedy, i guess. bangladesh may or may not need

tougher workplace safety rules but it is entirely appropriate for bangladesh to have different, and indeed lower, workplace safety standards than the united states. safety rules that are appropriate for the united states would be unnecessary in much poorer bangladesh. i grew up read being a factory that collapsed. they went to the mills and labor activism began and mills moved away. i read about bangladesh where these are women that would have been married off and extremely young ages and are going to work at these factories and it is actually -- in a way a form of empowerment for them. >> it is. there is no question that the garment industry that's been existing -- abolished since the insense in the '80s had been a boon for the work force. what we are saying is not to boycott that industry or to have the industry leave bangladesh but to accept human rights standards and norms. we cannot accept in 2013 that

certain people and certain countries are entitled to different human rights and labor standards than those of us in the united states. and the one point i want to make is oftentimes we make this analsy, you know in terms of turn of the century, 20th century, american economy, and now, we are in a global economy. and that every locals interact with the global economy. any solution to any kind of business model has to respond to that. it has to be a local solution and has to be an international solution and has to be in the human rights solution. can i not be isolated and left to a local -- local governments. >> no company should accept subcontractor who -- who sets up workers in a place that -- will collapse. mine, we are forgetting almost 1,200 people died in this accident. and i don't know if matt in that piece realized the death toll. after he wrote that -- only 50,

60 people. >> beginning. >> and -- there are a lot -- issue here for -- people like this is that -- that is emotionally horrifying to everyone but what we think about -- is how many people are dying from poverty because they don't have these opportunities. and if we can strike the perfect line where we don't have any of the guys who have shady factories but we do move people out of dollar day poverty, that would be wonderful. to the extent -- >> shun be either or. >> either or because -- that's the reality. that's the reality we face is that -- we don't have perfect enforcement and it is not easy to tell where the line is. ten cents a garment might sound cheap but -- people in bangladesh are really poor. i'm not even sure if that's a huge amount that might be a huge amount. ten cents for many people in the world is a lot of money. >> what you said earlier is that it is going to slow down the economic processes. what we are talking about is ten

cents per garment. and the average work earns $38 a month. we are not talking about -- >> seems like comparable numbers. when -- when walmart saying we -- whoever's source saying it, you are raising the cost as something that is similar to a worker's wage. you may be doubling effectively doubling the labor cost of bangladesh. it is not unrealistic. >> let's talk about u.s. workers. it is not surprising that walmart is one of the major retailers that is involved in the outsourcing. walmart, there's -- in the united states, with respect to american workers. u.s. workers. and so -- when we make this calculus that we are willing to have this hierarchy and willing to accept spiraling down of labor standards, it actually impacts american workers and that's another perspective. we are thinking about bangladesh is far away but when we spiral down and lower overall standards

we are lowering standards for american workers and we have seen that decline in the last 20 years. decline of union membership and low minimum wage and so those battles are happening here. so we need to really look at it in a -- >> there also is the issue of -- you know, said that -- it started here and it ended in bangladesh and also raises the question -- you know, if companies start leave bangladesh is there anywhere else left for them to go? [ whirring ] [ dog barks ] i want to treat more dogs. ♪ our business needs more cases. [ male announcer ] where do you want to take your business? i need help selling art. [ male announcer ] from broadband to web hosting to mobile apps, small business solutions from at&t have the security you need to get you there. call us. we can show you how at&t solutions can help you do what you do... even better. ♪

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>> it is because china is now investing in africa. which is -- our next big frontier. china was at least lower than vietnam and pakistan. maybe not cambodia and bangladesh. 20 years ago. right. one of the poorest countries on earth. most of the poorest children in the world lived in china 20 years ago and now highest the list. soon it will be higher than that. right. soon there will be a larger economy than the united states. and so that's caused a lot of problems for people around the world. lost factories in the town i was born. puts pressure on bangladesh. but 1.3 billion people there. we are improving their lives. we are building cities for them. and trains and ports and hospitals and schools. that if anything is a beautiful thing. >> that's a wonderful thing. >> health care, cities already polluted. mine, making china absound like a paradise. >> it is not a paradise. it is progress.

now they have the security to stand up and say we want even more. we want -- accountability from our government. you don't say that when you are worried about, you know, does my child have food tomorrow? you are not going to be complain being a political thing. but now that -- now that they do have a job, now i want, you know, a government that's accountable to me. now i want, you know, a better retirement. now i want these things. having that economic base allows you to demand even more. and that we have been able -- that -- i guess -- global -- you think -- that china has been able to achieve that transition and amazing. it has been costly for lots of people. pollution has been awful. wages down in america. part of my town died. there are lots of things that have been bad. but -- >> people in bangladesh have to start demanding the same things. >> but the people -- the people in bangladesh from the position of strength they have now, but if you -- if you put these standards on, that -- don't

allow them to build the base, they won't have the strength themselves to say -- >> you are talking with -- talking about -- labor costs and apparel is a cost of would things. hourly cost which we looked at. it is also a function of productivity. this is a business opportunity. an opportunity to become more productive and efficient and you can do that with a strong work force. you can do that when your work force is safe and working in good conditions and do that when -- your work force sevening a living wage and not worried about living in poverty. when they are free from the -- worries of taking care of a health concern. we are building a strong work force that's month only good for business but it is also good for the economy of bangladesh and economy of china, economy of the u.s. building a work force that's good for progress and in these countries that need it. it is not a short-term solution in paying the least amount that we can. it is a long-term solution in looking at growing bangladesh's economy. >> another issue here, too. in terms of the responsibility of consumers in the united states and where it is always -- you know, we respond to the

lowest possible price on anything and in that way if we -- reward companies by spending the extra nickel, dime, dollar, whatever it is. if we reward companies being a little bit more responsible, that could help alleviate the problem, too. >> we do. we hi about the food movement, organic movement, we do. some of us pay more for some of our products because we are concerned about the processes by which certain things are produced and as consumers and so -- we are open and willing to pay for more. what i want to be clear is that we are not talking about substantial increase from american consumers. also, you know, this notion that the industry in terms of garment has been connected to the international community -- economy. and so -- through trade adjustments and trade policies, so to say that oh, the people need to work it out on their own, ignores the economic reality. yes, there needs to be unions and needs to be sort of local

support. but there needs to be pressure on retailers to adopt standards. not boycott so it that goes -- leaves the industry but to adopt standards and the notion retailers are rejecteding standards, to me, is really concerning. because it is not saying that you are going to be liable here. it is saying the products that you are producing vshg corporate responsibility and corporate accountability to what you are producing that comes into gap and walmart. and that's really what these safety agreements are about. >> two years ago, at the triangle factory, the first time you had some serious regulation of workplaces, especially workplaces like that, garment factories, and -- it took 146 people to die and that's got to be -- that's true with bangladesh, too. you probably know more going on in bangladesh than i do but i'm sure right now there were riots

and there were strikes and there is going to be more of that. people in bangladesh will not let this continue. but it took that sacrifice of those people to do that. >> all right. what should we know for the news week for the week ahead? learn from what happened so we could be a better, safer energy company. i've been with bp for 24 years. i was part of the team that helped deliver on our commitments to the gulf - and i can tell you, safety is at the heart of everything we do. we've added cutting-edge safety equipment and technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all our drilling activity, twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. safety is a vital part of bp's commitment to america - and to the nearly 250,000 people who work with us here. we invest more in the u.s. than anywhere else in the world. over fifty-five billion dollars here in the last five years - making bp america's largest energy investor.

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so what should we know for the week coming up? we should know that democratic congressman john tierney of massachusetts has introduced legislation inspired by technology seen in the latest james bond film. he writes "bond escapes death when his handgun equipped with technology that recognizes him as its owner becomes inoperable when it's in the wrong hands. the technology exists in the form of pin code fingerprint scanners and specialized bracelets. in his bill, the personalized handgun safety act would require this within two years. this bill wouldn't take away any guns or limit magazine size. just prevent them from being fired by anyone but the owner. we should know that john edwards, yes, that john edwards,

is making his way back into public life. edwards recently reactivated his lawyer's license and scheduled to speak at a retreat on june 6th. with mark sanford returning to congress and anthony weiner prepping a new york city mayoral run. we shouldn't be surprised after a year after his acquittal, edwards is beginning his comeback. speaking of former presidential nominees, with the addition of walter mondale and michael dukakis this week, all living democratic presidential nominees now support marriage equality. all the likely 2016 democratic presidential candidates support marriage equality. the same cannot be said for republicans, not yet. we should know that canada is experiencing a scandal of it own. the editor of gawker reported he had seen a video of the mayor

there smoking crack cocaine. two star reporters believe the man in question is in fact the mayor. whomever took the video is now trying to sell it for $200,000 and gawker started a crowd sourced campaign to purchase it called the "rob ford crack starter." in a press conference on friday, ford called the allegations ridiculous and said the toronto star reporters are "pathological liars." mayor ford has had an incredibly colorful career. he put rob ford mayor magnets on strangers cars once. he once pleaded no contest to drunk driving and he was once involved in a drunken altercation at a hockey game. after ford once said politics is too male-driven he invited any women interested in running for office to coffee so he could "explain how politics works." here's how it works, don't get caught smoking crack. that's my first advice. let's start with chaumtoli. >> on friday, the 1199 endorsed

the mayoral candidate. in the past week, legal services went on strike. we're hoping that this will signal a labor's renaissance, especially with the bangladesh tragedy. on labor standards and labor rights in the united states. >> michael? >> what we should know is for the week ahead wells behind. how you get fair treatment at work. you have to dough manned it. a great abolitionist says power yields nothing without a demand. it never has and never will. can't depend on corporations to do it. we have to do it ourselves. >> we should know that the congressional budget office just lowered its estimate of how big the deficit is going to be over the next ten years. i still think that's too high and that the deficit hysteria has been overhyped and we're probably going to see a surplus. >> we should know that we're on the cusp of the next industrial revolution. you look at the u.s. and look back to the mill girls in lawrence and lowell, back to henry ford and mass production and now we're looking forward to

kus omization and the changes in innovation and machinery and advancement in manufacturing, especially in apparel that are happening. so we look forward to that change in the next industrial revolution. >> i know i got a reference to lowell, mass and michael dukakis. successful day for me. thanks to chaumtoli huq. karl smith of the model behavior blog at forbes.com and brenna schneider. thanks for getting up and thank you for joining us. we'll be back next weekend, saturday and sunday at 8:00 a.m. eastern time. guests include author michael hastings. up next is melissa harris-perry. on today's mph, angelina jolie sparked a national conversation about breast cancer. the corporate interests and disparity in access not so fortunate as ms. jolie. president obama's commencement speech. and melissa harris-perry is up next. we'll see you next week here

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